A Summit of the Americas Energy Working Group Update

[Report by the Responsible Coordinators, Venezuela and the United States, on the Summit of the Americas Mandate "Regional Energy Cooperation"] 

[XVII Meeting of the Summit Implementation Review Group, Washington D.C, 1999, November 19, 1999]

In December of 1994, at the largest Summit ever to take place in the Western Hemisphere, and the first such gathering in 27 years, President Clinton and 33 of the region’s democratically elected Heads of State met at the first Summit of the Americas in Miami, Florida. The Summit provided the opportunity for the region’s energy sector to build upon the strong political and economic transformation sweeping the hemisphere. On energy, in general terms, the Summit’s Action Plan specifically provided the political guidance for the region’s energy ministries to begin to explore cooperation in areas of mutual interest and concern. Specifically, the Action Plan called for the development of consistent policies and frameworks to facilitate private investment in the energy sector.

The realization of four Hemispheric Energy Ministers Meetings, led by United States and Venezuela has contributed to the strengthening of the Hemispheric Energy Initiative (HEI) as a forum for discussion and promotion of integration mechanisms in the energy sector.

A Framework for Hemispheric Energy Cooperation

At the 1994 Miami Summit, the Heads of State signed the Summit of the America’s Action Plan. The Plan included action items addressing energy--action item 12, Energy Cooperation, and action item 21, the Partnership for Sustainable Energy Use. These two initiatives are the basis for the region’s commitment to promote economic growth and environmental protection under the energy rubric. The United States, through the Department of Energy (DOE), and Venezuela through the Ministry of Energy and Mines (MEM) were designated the principals for the Summit’s Energy Working Group. This Working Group has become known as the Hemispheric Energy Initiative (HEI).

The First Hemispheric Energy Ministers Meeting (Hemispheric Energy Symposium)

As the coordinators of the HEI, the U.S. DOE and the Venezuelan MEM agreed to host the First Hemispheric Energy Ministers Meeting, in furtherance of the Summit’s Energy Working Group, in October of 1995 in Washington, D.C. During the meeting, public and private energy representatives presented national energy policies, discussed regional issues and steps for implementing the Action Plan. The participants identified over 40 collaborative actions as next steps for the Hemispheric Energy Initiative.

To ensure implementation of these actions, each Minister designated a representative to an implementing body, which is the Hemispheric Energy Steering Committee. The committee’s members are drawn from national governments, and they periodically meet along with representatives from several multilateral and international organizations. At the first Hemispheric Energy Steering Committee Meeting, held later that year in Santiago, Chile, the Committee encapsulated the 40 collaborative actions into eight working groups. These eight working groups are: Opportunities in Natural Gas, chaired by Bolivia; Promoting Clean Energy Technologies in Electric Power Markets, chaired by Colombia; Promoting Regulatory Cooperation in the Hemisphere, chaired by Argentina; Petroleum Sector Cooperation, chaired by Venezuela; Energy Efficiency, chaired by Brazil; Expanding Rural Electricity Service, chaired by Chile; and Climate Change Information Sharing, chaired by Canada.

The Second Hemispheric Energy Ministers Meeting was held in Santa Cruz de la Sierra, Bolivia in July of 1996. The Ministers confirmed the key role of the energy sector in the achievement of sustainable development and recognized the need to promote private investment in the energy sector. Additionally, the Summit participants recognized and endorsed the work of the Hemispheric Energy Steering Committee in advancing sustainable development in the Americas.

The Third Meeting of the Western Hemispheric Energy Ministers took place in January 15-16, 1998, in Caracas, Venezuela. Twenty-six countries were represented.

At the Caracas meeting the Energy Ministers agreed to: (1) the promotion of policies that facilitate trade in the energy sector; (2) promotion of policies facilitating the development of infrastructure; (3) achievement of regulatory frameworks that are transparent and predictable; (4) promotion of local and foreign private investment; (5) expansion of rural electrification; and (6) activation of the working group on climate change in order to exchange information and analyze cooperative activities.

Additionally, Ministers agreed to the establishment of a Coordinating Secretariat to facilitate cooperation under the HEI. This Secretariat is composed of representatives from Venezuela, the United States and the Latin American Energy Organization (OLADE). The Secretariat serves as the administrative arm of the HEI and is primarily responsible for disseminating information, and coordinating its major events and activities. Venezuela is currently serving as the "virtual headquarters" for the Coordinating Secretariat.

The principal themes of the Second Summit of the Americas held in Santiago, Chile in April of 1998 were democracy, poverty alleviation, and regional integration. On energy, the Summit’s Plan of Action contained commitments to further the integration of energy markets and to exchange information on climate change related issues. The Heads of State recognize that the creation of energy links between our countries and the intensification of energy trade strengthens and promotes hemispheric integration. Energy integration based on competitive and transparent activities according to national special conditions and objectives contributes to sustainable development of our nations and the improvement of the quality of life of our people with a minimal impact on the environment.

In July of 1999, the region’s most senior private and public sector energy representatives again came together to participate in the Fourth Hemispheric Energy Ministers Meeting in New Orleans, Louisiana. The Ministers focused on policies and practices concerning regional integration and energy’s role in protecting the environment, with the understanding that such successful policies and practices will lead to the creation of sustainable energy infrastructures for the region in the 21^St century.

The Conference was divided in two parts. The first part featured interactive Roundtable discussions between senior government officials and industry representatives. This portion of the event attracted ministers and/or their representatives from 30 countries and over 400 other participants. The Conference focused on strategies to enhance investment in clean energy, opportunities for regional energy market integration, and continued transition to a market-oriented business climate.

The second part of the event related to the Fourth Hemispheric Energy Ministers Meeting and had the following objectives: 1) Evaluate the progress towards the fulfillment of the goals previously adopted; 2) Share experiences about the energy integration process and discuss ways to make further progress in this area; 3) Discuss the importance of the clean development and use of energy; 4) Encourage the region's energy business sector to organize itself into a Business Forum; and 5) Consider the extension of the current Coordinating Secretariat. At the conclusion of the Meeting, the Ministers unanimously approved the New Orleans Declaration, the Joint Statement on the Clean Development and Use of Energy, and the Business Forum.

In an effort to further hemispheric energy cooperation and develop partnerships for sustainable energy use, the region’s energy ministries through the HEI and its current seven Working Groups have developed a strong body of work. Following is a brief overview of some of the most important accomplishments of the working groups since the Santiago Summit in 1998:

In February 1999 on the occasion of the VIII Meeting of the Steering Committee, held in Lima, Peru, delegates concluded that the workshops on this matter carried out to date have been successful. The need to emphasize renewable technologies along with fossil fuels was particularly noted. They also recognized that the dissemination and transfer of knowledge about clean technologies is well advanced even though a wider dissemination of these technologies is still required in some countries, that more countries need to be participating in the Group’s discussions. They agreed on the need to proceed with a strategy designed to link all public and private entities with financial institutions. It was decided to take on a more direct role regarding tariff, tax and duties barriers, which negatively affect the expansion of advanced technologies (renewable and fossil fuels).

The topic was also addressed during the IV Ministerial Meeting, reflecting the following conclusions:

1. Nations must be practical about covering their energy needs and have the information available to them so that the proper technology is applied.

2. It is necessary to understand that technology application in one country does not imply that it will work in another country.

3. Regulatory reforms must maintain environmental excellence within a sustainable framework.

4. Fuel diversification strengthens the power generation base of the nations. Clean use of fossil fuels as well as renewable sources should be considered when formulating national energy plans.

The purpose of this Working Group is to identify ways in which the countries of the hemisphere can develop compatible regulatory frameworks that will facilitate an energy infrastructure and enhance trade in energy goods. The Working Group also reviews strategies that countries can adopt to improve the competency and effectiveness of regulatory institutions.

Effort of this Working Group is oriented toward the development of databases about supply and demand of regulatory aspects, including training opportunities in this field. As well as financial possibilities and maintenance and development of a WEB page.

In the Regulatory Cooperation Roundtable of New Orleans, delegates concluded that governments should identify the objectives of new policies before they develop the regulations to achieve these objectives. Furthermore, during the implementation process, they should continue to facilitate a dialogue between regulators and operators in order to allow for modifications and necessary revisions of the regulations. They underlined that governments need to establish transparent rule making to maintain investor confidence.

Oil Cooperation

The objective of this working group is to facilitate the petroleum agenda in the framework of the HEI and establish the basis for an integrated development for the sector, taking into account the catalyst role of energy, specially petroleum as a key input for economic and social development.

Recent activity developed by this Working Group includes a study on harmonization of fuel specifications of refined products, the initiation of a study in refining in Latin America and the Caribbean.

This group has oriented its efforts toward achieving a greater participation of the business sector in the hemisphere given its importance in the integration process. Accordingly the Petroleum roundtable in New Orleans reviewed private sector investments opportunities in the oil sector as well as mechanisms to mitigate risks associated with this kind of investment.

The main objective of the Natural Gas Working Group is to promote developments of hemispheric natural gas networks through the efforts of the private sector, as a main provider of funds and technology and to encourage governments, as facilitators and promoters.

During the Steering Committee Meeting held in Port Spain in June 1998 it was agreed to create four regional subgroups in order to improve the effectiveness of the Natural Gas Working Group. The subgroups with their corresponding progress are highlighted as follows:

• The Southern Cone. Coordinator: Bolivia

  • Realization of private sector forums to identify business opportunities in natural gas.

  • A workshop on the analysis of technical standards.

• North of South America and the Caribbean. Coordinator: Trinidad and Tobago.

  • Revision of feasibility studies related to natural gas projects.

  • The realization of a workshop on natural gas opportunities in the region is under consideration.

• Central America and Mexico. Coordinator: Mexico.

  • Feasibility studies of the gas pipeline from Mexico to Central America.

  • Regulatory Model (under study)

• North America and Mexico. Coordinator. United States

During the Natural Gas Roundtable in New Orleans, participants discussed various aspects related with natural gas development, as an important energy source. Also during the meeting, speakers presented interesting experiences such as, LNG development in Trinidad and Tobago, natural gas a regulatory framework in Venezuela, privatization of the natural gas sector in Argentina and the de-regulatory process in the United States.

Efficient use of energy is the foundation of any sustainable energy strategy in the Hemisphere that improves quality of life and increases economic growth. Technologies and practices that efficiently harness energy from either conventional or renewable sources into productive end uses can reduce overall energy cost and pollution.

This working group has made progress together with Canada and OLADE in the analysis of a proposal for labeling of household appliances. This proposal was distributed to member countries for their analysis. A home page on this topic was created in Portuguese and Spanish.

Participants of the New Orleans Roundtable indicated that consumers play a critical role in improving end use efficiency through their choices of products and services. Greater public-private partnerships are needed to educate and train consumers on the economic and environmental benefits of energy efficiency.

Cooperation within and between governments and the private sector works well in facilitating sustainable energy efficiency.

Rural Eelectrification

This group was established to promote and accelerate the deployment of economically and sustainable rural electrification solutions to increase energy services in rural and indigenous communities.

The issue of rural electrification was raised during the Santiago Summit of the Americas in 1998, with particular focus on alleviating poverty and improving the quality of life. Rural electrification efforts require clear policies and regulations, lower tariffs and tax barriers, human capacity building, minimal subsidies, project financing and institutional development.

The major recent accomplishments of this working group are:

• A survey to evaluate rural electrification in the Hemisphere.

• A proposal for a cooperation agreement in rural electrification between hemispheric energy ministers.

• Database development with key information on rural electrification

• Creation of a WEB Side has been proposed.

This working group was activated in order to exchange information and analyze activities and mechanisms for cooperation among the countries of the hemisphere, in the light of the UN Framework Convention on Climate Change and the decisions made at the third Conference of the Parties held in Kyoto.

A roundtable discussion of countries’ experiences and possible steps was held during the VIII Steering Committee meeting held in Lima, February 1999.

In this meeting the following work plan was proposed:

• Develop a series of Roundtable discussions on each country's experience and views.

• Workshops on the development of energy-related emissions inventories and the emissions monitoring and reporting.

• Workshops on potential national policies to address climate change and contribute to sustainable economic development of countries’ energy sectors.

• Workshop on CDM (or all international implementation mechanisms) with various experts, as well as interested representatives from the private sector and non-governmental organizations. This could build on other events, such as the IEA-sponsored CDM workshop in Brazil, the OLADE environment Conference and the Latin American Environment Ministries in Peru. Such a workshop could provide an opportunity to deepen the collective understanding of the various CDM issues (technical and institutional). The agenda could include an assessment of the potential contribution of the CDM to sustainable economic development in the Americas. An additional potential deliverable may be to define possible CDM projects in the Americas.

• A meeting of energy officials with select experts invited to talk on specific topics of interest to the group.

Note: The New Orleans Joint Statement on Clean Development and Use of Energy envisions commitments by the region's energy ministers to the implementation of sustainable energy policies and to the taking of concrete steps to establish policies and programs that will enhance investment in energy efficiency in clean energy technology. Moreover, the Ministers recognized the value of promoting the full use, on a voluntary basis, of the flexibility mechanism referred to in the Kyoto Protocol, in order to fulfill the objectives of the Convention.

1. Formalize the structure of the HEI including the Coordinating Secretariat and financial mechanisms.

2. To incorporate more countries as active participants in the HEI.

3. To improve cooperation mechanisms with the private sector as a way accelerate the accomplishments of the HEI objectives.

4. Incorporate advisors from national and international organizations to the working groups.

5. Promote a closer link between the trade and energy sectors negotiations within the Summit of the Americas.

? Miami Summit of the Americas, Florida, December 1994

? The Hemispheric Energy Symposium/First Hemispheric Energy Ministers Meeting, Washington, D.C., October 1995

? First Hemispheric Energy Steering Committee Meeting in Santiago, Chile, February 1996

? First Hemispheric Conference of Hemispheric Energy Regulators, Mexico, July 1996

? Second Hemispheric Energy Ministers Meeting, Santa Cruz, Bolivia, July 1996

? Hemispheric Summit on Sustainable Development, Santa Cruz, Bolivia, December 1996

? First Energy Business Forum of the Americas, January 1998

? Third Hemispheric Meeting of Energy Ministers, Venezuela, January 1998

? Santiago Summit of the Americas, Chile, April 1998

? Launching of the Hemispheric Energy Initiative WEB Page, January 1999

? VIII Steering Committee Meeting, Lima, Peru, February 1999

? 4^th Hemispheric Energy Ministers Meeting, New Orleans, July 1999

 

Caribbean/Latin American Action (C/LAA) Meeting: The Caribbean/Latin American Action’s 23^rd Annual Meeting on the Caribbean and Latin America, scheduled for December 7-10, 1999, will host a series of workshops entitled: Developing a More Resilient Energy Infrastructure for the Caribbean Islands; A Clean Energy Mix Supporting Hemispheric Economic Development; and the Hemispheric Energy Business Forum-A Stimulus to Fresh Thinking in Energy Integration.

Caribbean/Latin American Action (C/LAA) Meeting: The Caribbean/Latin American Action�s 23rd Annual Meeting on the Caribbean and Latin America, scheduled for December 7-10, 1999, will be used to host a series of workshops entitled: Developing a More Resilient Energy Infrastructure for the Caribbean Islands; A Clean Energy Mix Supporting Hemispheric Economic Development; and the Hemispheric Energy Business Forum-A Stimulus to Fresh Thinking in Energy Integration.

Hemispheric Energy Steering Committee Meeting: The IX Hemispheric Energy Steering Committee meeting is scheduled for January of 2000. The location and details of the agenda are currently under discussion by Hemispheric Energy Initiative representatives.

Meeting of Energy Ministers: Mexico will host the Fifth meeting of Western Hemisphere Energy Ministers in the first half of the year 2000. The dates and the agenda are in the process of being finalized.

Additional Information

Additional information on any of the subjects addressed within, and other Western Hemisphere Energy Initiative related activities could be found on the Hemispheric Energy Initiative WEB Page at www.americasenergy.org